In November 2025, Norway ordered a review of its investing rulebook after controversy over exits from certain Israeli and U.S. firms. On Thursday, the Gjedrem Committee sent its conclusions to the Ministry of Finance, pressing for a reset on defense exposure and writing that "Norges Bank must be prepared for situations where conflicts escalate into war."
Their case leaned on a rougher backdrop. The committee pointed to wars in the Middle East and Ukraine, energy security worries, and a world where "the liberal, rules-based international order is in decline." It also noted the fund's scale now gives it better boardroom access than it had in 2003.
Current rules exclude companies involved in producing nuclear arms, keeping Airbus, BAE Systems, Boeing, BWX Technologies and Lockheed Martin off limits. Even so, the fund already holds defense exposures such as 1.5% of Italy's Leonardo and a 2.3% position in Germany's Rheinmetall.
The committee said the nuclear screen should remain but be redrawn: "The Fund is not to be invested in companies that produce nuclear weapons, unless the company is domiciled in a nuclear-weapon state under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) that is allied with Norway." By that logic, "Several European and American companies that produce components for nuclear weapons can therefore be reincluded." It further argued that the mandate should cover manufacturers of arms that Norway requires to defend itself, and it suggested removing the obligation to evaluate whether a company's products are employed in accordance with international humanitarian law. Nothing changes in the holdings today, but the path is there to add some U.S. and European defense stocks that are currently out.
Built in the 1990s to invest Norway's oil and gas revenues, the fund is run by Norges Bank Investment Management, with past exclusions typically based on advice from an independent Council on Ethics. The committee wants the Council to continue, but only to analyze breaches of the guidelines, not advise NBIM on what actions to take.
It flagged diplomatic and financial risks if exclusions are seen abroad as Norway's policy: other governments can "more readily perceive ethically motivated exclusions as the policy of the Norwegian government," noting "There have been reactions and threats of countermeasures." The report warned that "Retaliatory measures could hit the Fund and other Norwegian interests," and that "High government debt can jeopardize economic stability in countries, but can also give an incentive to look to foreign investors' interest and dividend income as a revenue base for the state."
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The mechanics are already in flux. Until November 2025, Norges Bank's Executive Board decided on exclusions or observation listings based on Council advice. Pending the review, temporary rules removed the Board's ability to make new exclusion or observation decisions and limited it to revoking earlier ones, while the Council lost its ability to recommend new exclusions or observation.
Those interim rules will stay until a parliamentary vote expected in mid 2027. Next steps: a public consultation, the central bank's response due in January, and a finance ministry white paper in the spring. Until parliament votes, the existing ethics and exclusion rules stay in place.
Pushback has arrived from Washington and humanitarian groups. The U.S. State Department said to CNBC in September last year that it was "very troubled" by NBIM's divestment from Caterpillar and five Israeli banks, describing the decision as resting on "illegitimate claims." NBIM had cited "unacceptable risk," saying its decision rested on the possibility the firms were implicated in rights violations in Palestinian territories, while Norway's finance minister, Jens Stoltenberg, said it was "not a political decision."
At home, Amnesty International Norway's secretary general John Peder Egenæs said the new proposals "risk weakening accountability and integrity and dismantling key human rights protections," adding, "Other investors pay attention, and companies do too." The Norwegian Red Cross' Grete Herlofson called investing in nuclear weapons producers "ethically and humanitarianly completely incomprehensible," warning it "increases the risk that they could be used." The Council on Ethics chair, Svein Richard Brandtzæg, said the Council "will study the report carefully" and submit a response during the public consultation.
The bottom line: nothing shifts in the portfolio right now. But a mid 2027 vote could widen the investable defense universe for the world's largest sovereign wealth fund, which already holds about 1.5% of global equities. In plain English: any rule change here could tilt a lot of passive money toward a bigger slice of Western defense suppliers.
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